The global speciality reinsurance market is heading into the January 1 renewal season with ample capacity, softening pricing in several lines and a generally constructive environment for buyers, according to a new market update from Guy Carpenter.

In its Global Specialities 2025 Market Update, the reinsurance broker said strong fundamentals mean a positive outlook for renewals, even as reinsurers face a risk landscape shaped by geopolitical tensions, inflation and complex claims dynamics.

“Strong speciality market fundamentals present a positive market environment for clients and growth opportunities for reinsurers,” the report said, pointing to increased retained earnings, growth in dedicated reinsurer capital and a desire to expand across speciality lines.

Guy Carpenter said the balance of supply and demand will favour buyers as renewals approach, with the reinsurance and retrocession markets continuing to soften overall. “Looking ahead, we predict a likely increase in demand for capacity with a softening reinsurance and retro market,” the broker said, adding that clients are expected to seek greater collaboration and better terms with their reinsurance partners.

While conditions vary by line, the report pointed to widespread capacity availability across many speciality classes. In marine and energy, oversupply has driven material rate reductions, while in terrorism and political violence lines, a lack of major losses and new entrants has raised the competition. Construction and engineering reinsurance capacity is also at its highest level in five years, giving clients scope to push for higher limits, quota share participation and better economics at renewal.

However, the broker warned that recent loss activity in some sectors has moderated the pace of softening. In non-marine retrocession, more rate reductions were checked by wildfire losses in the United States, while aviation pricing has been influenced by high-profile airline losses earlier in the year.

For Bermudian-based reinsurers and insurance-linked securities capital, the report points to opportunity as January 1 approaches. Guy Carpenter noted growing participation by non-traditional and specialist markets like Bermuda in quota share and speciality treaty structures, particularly in construction and other global specialities.

“There is a sustained appetite for growth, and we anticipate those reinsurers who are willing to offer flexibility, product differentiation and innovation are most likely to prevail,” the report said.